It’s official: we’re in a recession. The U.S. economy shrank by 0.9% in the second quarter, according to figures released Thursday by the Bureau of Economic Analysis. This follows the -1.6% contraction in quarter one. Now is precisely not the time to ram through Senate Democrats’ Green New Deal slush fund and tax hikes that will further harm our weakened supply chain.
Now is not the time for indebting future generations through bipartisan microchip corporate welfare giveaways that distort the market and favor a few, well-connected firms (including one where House Speaker Nancy Pelosi’s husband has been a major investor).
President Joe Biden lied and told us “We’re not gonna be in a recession.” We’re there. Meanwhile, Biden’s Securities and Exchange Commission Chairman Gary Gensler is working his hardest — and refusing to answer questions — to plunge us even further through new onerous climate regulations that will reduce competition and hurt consumers.
On Tuesday, America saw another drop in consumer confidence numbers, a measure which has now fallen for three consecutive months. June’s report showed the Consumer Confidence Index at its lowest level since February 2021 — now it’s fallen even further.
And the consumer Expectations Index — “consumers’ short-term outlook for income, business and labor market conditions,” as measured by the Conference Board last month hit its lowest level since 2013. It fell even further in July.
American Enterprise Institute (AEI) scholar Desmond Lachman also notes “the approximate doubling in mortgage rates since the start of the year has reduced housing affordability to its lowest level in the past 30 years. That has caused a major slump in mortgage demand.”
Biden’s Treasury Secretary Janet Yellen tried to gaslight the American people, we know better. Sunday on “Meet the Press” Yellen claimed, “I would be amazed if the NBER [the National Bureau of Economic Research] would declare this period to be a recession, even if it happens to have two quarters of negative growth. We’ve got a very strong labor market. When you’re creating almost 400,000 jobs a month, that is not a recession.”
Out-of-touch Yellen wants the American people to sit and be lectured to by a government bureaucracy like NBER about technical definitions while they suffer under shrinking paychecks due to inflation’s ravages. Yellen and her colleagues ignore that there are more than three million fewer Americans working today than before the pandemic (The Wall Street Journal’s Peggy Noonan notes “3.25 million Americans have left the workforce — labor-force participation among Americans 16 and older is 62.2%, down from 63.4% in February 2020.”) and that inflation has wiped out pay raises for millions of Americans.
Meanwhile, the Federal Reserve led by Biden-renominated Jay Powell will likely plunge us further into recession with steep rate hikes.
Under Powell’s watch, banks will win and everyday people lose, as AEI economists Paul H. Kupiec and Alex J. Pollock report: “For the first time in its 108-year history, the Federal Reserve System faces massive and growing mark-to-market losses and is projected to post large operating losses in the near future … Because they are now paid interest on their reserve balances and receive guaranteed dividends on their Federal Reserve stock, member banks will monetarily benefit from the Fed’s policy to fight inflation while the public bears Federal Reserve system losses. Meanwhile, the public at large will also face the costs of higher interest rates, reduced growth and employment and losses in their investment and retirement account balances.”
Biden promised America he would afflict the comfortable and comfort the afflicted. He and Congress are doing the opposite.